The share value of key Telstra partner HTC fell 10% last night over concerns that the Company could suffer following the lodging of a claim by Apple that the Taiwanese Company is infringing on Apple patents in the production of Android based mobile phones.
Set to back HTC in their fight with Apple is Google, the developers of the Android based operating system. At this stage Google are not named in the claim made by Apple who earlier this week filed complaints with both the U.S International Trade Commission and a US Federal Court alleging that HTC infringed on Apple’s patents involving the iPhones touch-screen user interface, hardware and software.
Last year Telstra started to build a close relationship with HTC, with David Thodey the CEO of Telstra praising the work being done by the Company in the development of Android based handsets on several occasions this year.
Late last year and only days after returning from a trip to HTC to witness firsthand the roadmap that HTC was planning for their Android and Windows based phones using “touch” screen technology Holly Kramer the former product marketing director at Telstra quit the national carrier.
Now analysts are claiming that Apple’s patent lawsuit against HTC could put additional pressure on the Taiwanese smart-phone maker, if Apple succeeds in barring the sale of HTC phones in the U.S. market where half their sales come from.
Success by Apple could also hurt several other Smartphone vendors who are now using touch screen technology similar to the Two Finger technology that Apple owns the patents to.
Just before the recent World Mobile Congress in Barcelona Apple said it would defend their touch screen technology should anybody dare to copy it?
On an iPhone, you can zoom in on part of the screen by moving two fingers apart and zoom out by moving them back together. Apple acquired this multi-touch technology along with a collection of patents when it bought a Swedish firm called FingerWorks.
Firms like Samsung, LG, HTC, Nokia and Motorola are all moving to touchscreen technology similar to what is found on the iPhone.
They also have their own touchscreen patents in pace which could make it difficult to challenge Apple say analysts.
Geoff Blaber, an analyst at market research firm CCS Insight in London Blaber said “There are often workarounds that let firms achieve the same touch-screen capabilities in different ways. Who owns the intellectual property is unclear – it’s very murky territory.”
He added “It would be a very dangerous move for Apple to begin robustly defending patents claims in Europe because it is a very new area.” Such action could prompt rivals to file costly counter-suits, he says.
Apple claim that HTC is infringing on 20 patents related to its popular iPhone.
“If Apple wins the lawsuit, this may potentially affect HTC’s revenues and their competitiveness in the long run,” Chia-lin Lu, an analyst at Macquarie Capital Securities told the Wall Street Journal.
In Australia HTC is investing heavily in its brand which is now being sold by most carriers including mass retailers like Harvey Norman.
A lot of their success has come following early support of Google with their Android operating system. It was the first company to sell an Android-based phone, and makes Google’s Nexus one phone, which the Internet giant is selling directly to customers.
But HTC’s strategy to move into the lower-priced smart phone segment to differentiate itself from market leaders hasn’t been smooth because of the firm’s lack of brand recognition compared to more established competitors like Nokia, Samsung and LG. The move to sell cheaper handsets has also been putting pressure on HTC’s margins.